I live overseas and have done for 33 years. All my pension and SS money was paid for overseas. I use to get exemption from 2555 and 1116 forms, however I do not think this covers me after retirement?

If the Social Security and pension income is NOT subject to taxes in the country where you live (likely if there is a tax treaty between that country and the U.S.), then your assumption is CORRECT: neither Form 2555 nor Form 1116 apply.

The pension income cannot be excluded from income via Form 2555. However, if the pension income is subject to foreign income taxes, then Form 1116 can be used to avoid double taxation.

The treatment for pension and social security benefits depend upon tax treaty between U.S. and your resident country. Normally, social security, government pension and public pension are taxable only in the source country while private pension is taxable in the resident country. Your country of residence?

Hello,

I am a US citizen and have been working in Switzerland for more than 30 years. Now retired, I still live here. My pension comes from the Swiss government pension fund and is taxed here. Here my Swiss taxes are low, and this compounded with a low USD against the CHF in 2011, gives me a high taxable income. I have been using the form 1116 and wonder if the 2555 foreign earned income form can be applied to my situation. Thanks IJD

Form 2555 cannot be used to exclude pension, but, under tbe tax treaty, the pension is probably NOT subject to U.S. income taxes.